How to create a financial forecast for a crazy golf company?
Creating a financial forecast for your crazy golf company, and ensuring it stays up to date, is the only way to maintain visibility on future cash flows.
This might sound complex, but with the right guidance and tools, creating an accurate financial forecast for your crazy golf company is not that hard.
In this guide, we'll cover everything from the main goal of a financial projection, the data you need as input, to the tables that compose it, and the tools that can help you build a forecast efficiently.
Without further ado, let us begin!
Why create and maintain a financial forecast for a crazy golf company?
Creating and maintaining an up-to-date financial forecast is the only way to steer the development of your crazy golf company and ensure that it can be financially viable in the years to come.
A financial plan for a crazy golf company enables you to look at your business in detail - from income to operating costs and investments - to evaluate its expected profitability and future cash flows.
This gives you the visibility needed to plan future investments and expansion with confidence.
And, when your trading environment gets tougher, having an up to date crazy golf company forecast enables you to detect potential upcoming financing shortfalls in advance, enabling you to make adjustments or secure financing before you run out of cash.
It’s also important to remember that your crazy golf company's financial forecast will be essential when looking for financing. You can be 100% certain that banks and investors will ask to see your numbers, so make sure they’re set out accurately and attractively.
Need a convincing business plan?
The Business Plan Shop makes it easy to create a financial forecast to assess the potential profitability of your projects, and write a business plan that’ll wow investors.
What information is used as input to build a crazy golf company financial forecast?
A crazy golf company's financial forecast needs to be built on the right foundation: your assumptions.
The data required to create your assumptions will depend on whether you are a new or existing crazy golf company.
If you are creating (or updating) the forecast of an existing crazy golf company, then your main inputs will be historical accounting data and operating metrics, and your team’s view on what to expect for the next three to five years.
If you are building financial projections for a new crazy golf company startup, you will need to rely on market research to form your go-to-market strategy and derive your sales forecast.
For a new venture, you will also need an itemised list of resources needed for the crazy golf company to operate, along with a list of equipment required to launch the venture (more on that below).
Now that you understand what is needed, let’s have a look at what elements will make up your crazy golf company's financial forecast.
The sales forecast for a crazy golf company
From experience, it is usually best to start creating your crazy golf company financial forecast by your sales forecast.
To create an accurate sales forecast for your crazy golf company, you will have to rely on the data collected in your market research, or if you're running an existing crazy golf company, the historical data of the business, to estimate two key variables:
- The average price
- The number of monthly transactions
To get there, you will need to consider the following factors:
- Weather conditions: As a crazy golf company, your business is highly dependent on the weather. Inclement weather such as rain or extreme heat can significantly decrease the number of customers and transactions, leading to a decrease in average price.
- Seasonal demand: The demand for crazy golf tends to be higher during the summer months and school holidays. This can lead to an increase in average price as customers are willing to pay more during peak season.
- Competition: The presence of other crazy golf companies in the area can affect your average price and number of transactions. If there is a lot of competition, you may need to lower your prices or offer promotions to attract customers, which can decrease your average price.
- Special events: Hosting special events such as birthday parties or corporate events can affect your average price. These events can bring in a large number of customers, leading to an increase in average price, but they may also require discounts or special packages, which can decrease your average price.
- Maintenance and upgrades: Regular maintenance and upgrades of your crazy golf course can affect your average price. If your course is well-maintained and has new attractions, you may be able to charge higher prices and attract more customers. However, if your course is in poor condition, it can lead to a decrease in both average price and number of transactions.
Once you have an idea of what your future sales will look like, it will be time to work on your overhead budget. Let’s see what this entails.
Need a convincing business plan?
The Business Plan Shop makes it easy to create a financial forecast to assess the potential profitability of your projects, and write a business plan that’ll wow investors.
The operating expenses for a crazy golf company
The next step is to estimate the costs you’ll have to incur to operate your crazy golf company.
These will vary based on where your business is located, and its overall size (level of sales, personnel, etc.).
But your crazy golf company's operating expenses should normally include the following items:
- Staff Costs: This includes the salaries, benefits, and taxes for your employees, as well as any training or development costs.
- Rent and Utilities: This covers the cost of your facility, including electricity, water, and internet.
- Equipment Maintenance: As a crazy golf company, you'll need to maintain your clubs, balls, and other equipment to ensure they're in good condition for your customers.
- Marketing and Advertising: To attract customers to your crazy golf course, you'll need to invest in marketing and advertising efforts such as social media ads, flyers, and partnerships with local businesses.
- Accountancy Fees: It's important to have a professional handle your company's finances, so budget for the cost of hiring an accountant.
- Insurance Costs: This covers liability insurance to protect your business in case of any accidents or injuries on the course.
- Software Licences: You'll need to invest in software for booking and managing tee times, as well as for tracking customer data and sales.
- Supplies: This includes items like scorecards, pencils, and other supplies needed to run your crazy golf course.
- Food and Beverage: If you plan on offering food and drinks at your course, budget for the cost of purchasing and stocking these items.
- Legal Fees: It's important to have a lawyer review any contracts or agreements related to your business, so factor in the cost of legal fees.
- Banking Fees: This includes charges for processing credit card payments and maintaining a business bank account.
- Cleaning and Maintenance: Regular maintenance and cleaning of your course will be necessary to keep it in good condition for customers.
- Entertainment: As a crazy golf company, you may want to offer additional entertainment options such as live music or themed events, so budget for these costs.
- Taxes and Licensing: Make sure to account for any taxes and licensing fees required to operate your business legally.
- Professional Memberships: Joining industry associations or organizations can provide valuable resources and networking opportunities, but may come with a membership fee.
This list is not exhaustive by any means, and will need to be tailored to your crazy golf company's specific circumstances.
What investments are needed to start or grow a crazy golf company?
Once you have an idea of how much sales you could achieve and what it will cost to run your crazy golf company, it is time to look into the equipment required to launch or expand the activity.
For a crazy golf company, capital expenditures and initial working capital items could include:
- Golf Course Construction: This includes the cost of purchasing land, designing and building the course, and installing necessary equipment such as putting greens, obstacles, and water features.
- Clubhouse and Facilities: This refers to the construction or renovation of a building to serve as the main gathering place for players, as well as the installation of amenities such as restrooms, locker rooms, and a pro shop.
- Golf Carts and Maintenance Equipment: As a crazy golf company, you will need to invest in golf carts for players to use on the course, as well as maintenance equipment such as mowers, trimmers, and other tools to keep the course in top condition.
- Party and Event Equipment: If you plan on hosting events and parties at your crazy golf course, you may need to purchase items such as tables, chairs, tents, and decorations to create a festive atmosphere.
- Technology and Software: In today's digital age, investing in technology and software can greatly enhance the operations of your crazy golf company. This may include online booking systems, point-of-sale systems, and customer relationship management software.
Again, this list will need to be adjusted according to the specificities of your crazy golf company.
Need a convincing business plan?
The Business Plan Shop makes it easy to create a financial forecast to assess the potential profitability of your projects, and write a business plan that’ll wow investors.
The financing plan of your crazy golf company
The next step in the creation of your financial forecast for your crazy golf company is to think about how you might finance your business.
You will have to assess how much capital will come from shareholders (equity) and how much can be secured through banks.
Bank loans will have to be modelled so that you can separate the interest expenses from the repayments of principal, and include all this data in your forecast.
Issuing share capital and obtaining a bank loan are two of the most common ways that entrepreneurs finance their businesses.
What tables compose the financial plan for a crazy golf company?
Now let's have a look at the main output tables of your crazy golf company's financial forecast.
The profit & loss forecast
The forecasted profit & loss statement will enable you to visualise your crazy golf company's expected growth and profitability over the next three to five years.
A financially viable P&L statement for a crazy golf company should normally show:
- Sales growing above inflation
- Stable or expanding (ideally) profit margins
- A net profit
This will of course depend on the stage of your business: a new venture might be loss-making until it reaches its breakeven point in year 2 or 3, for example.
The projected balance sheet
The projected balance sheet gives an overview of your crazy golf company's financial structure at the end of the financial year.
It is composed of three categories of items: assets, liabilities and equity:
- Assets: are what the business possesses and uses to produce cash flows. It includes resources such as cash, buildings, equipment, and accounts receivable (money owed by clients).
- Liabilities: are the debts of your crazy golf company. They include accounts payable (money owed to suppliers), taxes due and bank loans.
- Equity: is the combination of what has been invested by the business owners and the cumulative profits to date (which are called retained earnings). Equity is a proxy for the value of the owner's stake in the business.
The cash flow forecast
Your crazy golf company's cash flow forecast shows how much cash your business is expected to consume or generate in the years to come.
It is best practice to organise the cash flow forecast by nature to better explain where cash is used or generated by the crazy golf company:
- Operating cash flow: shows how much cash is generated by the operating activities
- Investing cash flow: shows how much will be invested in capital expenditure to maintain or expand the business
- Financing cash flow: shows if the business is raising new capital or repaying financiers (debt repayment, dividends)
Keeping an eye on (and regularly updating) your crazy golf company's cash flow forecast is key to ensuring that your business has sufficient liquidity to operate normally and to detect financing requirements as early as possible.
If you are trying to raise capital, you will normally be asked to provide a monthly cash flow forecast in your crazy golf company's financial plan - so that banks or investors can assess seasonal variation and ensure your business is appropriately capitalised.
Need a convincing business plan?
The Business Plan Shop makes it easy to create a financial forecast to assess the potential profitability of your projects, and write a business plan that’ll wow investors.
Which tool should you use to create your crazy golf company's financial projections?
Building a crazy golf company financial forecast is not difficult provided that you use the right tool for the job. Let’s see what options are available below.
Using online financial projection software to build your crazy golf company's forecast
The modern and easiest way to build a forecast is to use professional financial projection software such as the one we offer at The Business Plan Shop.
There are several advantages to using specialised software:
- You can easily create your financial forecast by letting the software take care of the financial calculations for you without errors
- You have access to complete financial forecast templates
- You get a complete financial forecast ready to be sent to your bank or investors
- You can easily track your actual financial performance against your financial forecast, and recalibrate your forecast as the year goes by
- You can create scenarios to stress test your forecast's main assumptions
- You can easily update your forecast as time goes by to maintain visibility on future cash flows
- You have a friendly support team on standby to assist you when you are stuck
- It’s cost-efficient and much cheaper than using an accountant or consultant (see below)
If you are interested in this type of solution, you can try our forecasting software for free by signing up here.
Calling in a financial consultant or chartered accountant
Outsourcing the creation of your crazy golf company financial forecast is another possible solution.
This will cost more than using software as you can expect as your price will have to cover the accountant’s time, software cost, and profit margin.
Price can vary greatly based on the complexity of your business. For a small business, from experience, a simple three-year financial forecast (including a balance sheet, income statement, and cash flow statement) will start at around £700 or $1,000.
Bear in mind that this is for forecasts produced at a single point in time, updating or tracking your forecast against actuals will cost extra.
If you decide to outsource your forecasting:
- Make sure the professional has direct experience in your industry and is able to challenge your assumptions constructively.
- Steer away from consultants using sectorial ratios to build their client’s financial forecasts (these projections are worthless for a small business).
Why not use a spreadsheet such as Excel or Google Sheets to build your crazy golf company's financial forecast?
Creating an accurate and error-free crazy golf company financial forecast with a spreadsheet is very technical and requires a deep knowledge of accounting and an understanding of financial modelling.
Very few business owners are financially savvy enough to be able to build a forecast themselves on Excel without making mistakes.
Lenders and investors know this, which is why forecasts created on Excel by the business owner are often frowned upon.
Having numbers one can trust is key when it comes to financial forecasting and to that end using software is much safer.
Using financial forecasting software is also faster than using a spreadsheet, and, with the rise of artificial intelligence, software is also becoming smarter at helping us analyse the numbers to make smarter decisions.
Finally, like everything with spreadsheets, tracking actuals vs. forecasts and keeping your projections up to date as the year progresses is manual, tedious, and error-prone. Whereas financial projection software like The Business Plan Shop is built for this.
Need a convincing business plan?
The Business Plan Shop makes it easy to create a financial forecast to assess the potential profitability of your projects, and write a business plan that’ll wow investors.
Use our financial forecast templates for inspiration
The Business Plan Shop has dozens of financial forecast examples available.
Our templates contain both a financial forecast and a written business plan which presents, in detail, the company, the team, the strategy, and the medium-term objectives.
Our templates are a great source of inspiration, whether you just want to see what a complete business plan looks like, or are looking for concrete examples of how you should model financial elements in your own forecast.
Takeaways
- A financial projection shows expected growth, profitability, and cash generation for your business over the next three to five years.
- Tracking actuals vs. forecast and keeping your financial forecast up-to-date is the only way to maintain visibility on future cash flows.
- Using financial forecasting software makes it easy to create and maintain up-to-date projections for your crazy golf company.
You have reached the end of our guide. We hope you now have a better understanding of how to create a financial forecast for a crazy golf company. Don't hesitate to contact our team if you have any questions or want to share your experience building forecasts!
Need a convincing business plan?
The Business Plan Shop makes it easy to create a financial forecast to assess the potential profitability of your projects, and write a business plan that’ll wow investors.
Also on The Business Plan Shop
- Example of financial projections
- How to create a turnover forecast for a business?
- Example of financial forecast for business idea
Know someone who runs or wants to start a crazy golf company? Share our financial projection guide with them!
Founder & CEO at The Business Plan Shop Ltd
